Former Somerville lawyer sentenced for mortgage scheme

A former Somerville real estate attorney has been sentenced to two to three years in prison for mortgage fraud and ordered to pay $2.6 million in restitution.

Kevin Carey, 49, of Middleborough, pleaded guilty in September to eight counts of larceny over $250 and seven counts of willfully making a false statement regarding financial conditions or assets. In addition to the prison sentence and restitution, Judge D. Lloyd Macdonald ordered Carey to 10 years’ probation, Attorney General Martha Coakley’s Office said.

According to the AG’s Office, Carey serially refinanced mortgages on four residential properties that he or members of his family owned, taking out one mortgage after another but failing to pay off the earlier loans.

From April 2002 through September 2004, Carey served as the closing attorney on mortgage loans for each of the four properties involved. He “stacked” three mortgage on a home in Medford and two mortgages each on two properties in Everett, and he took out a mortgage on his own home in Medford. Carey was also the agent for a New England title insurance company that allowed him to issue title insurance policies on mortgage transactions he processed.

Once he received the loans, Carey kept the money instead of paying off the existing mortgages, stealing more than $2 million, Coakley’s office said, and kept the lenders in the dark by making monthly payments on all the loans.

But in November 2005, a database search by Fannie Mae flagged the multiple mortgages on one of the properties, triggering a notification of the lenders, who then alerted the title insurance company, who in turn referred the matter to the AG’s Office.